Economic Downward Spiral Good For Obama

It appears that the looming economic disaster is helping Obama.
This is because the president and by association his party gets blamed for economic woes.
In most cases this is unfair because the President does not have as much influence on the economy as people think.
Also some people are actually saying things are so bad we need another FDR and that is Obama.
Poppycock.
First FDR did not get us out of a Depression. All of his programs did nothing to turn the economy around. What got us out of the depression was WWII. First Arming England and Russia through the lend lease program and then our own forces when we entered the war followed by a surge in demand for consumer goods after the war.
Second Obama's economic policy would not help it would hurt. We want to grow the public sector economy not the government sector. Even if Obama did not raise taxes (of course we know he will) he would limit the amount of capital available to the private sector through deficit spending. There is not an infinite supply of capital. The more the government spends the less capital is available to finance the public sector.
The Federal Governments spending is the biggest problem. Obama says he will spend more. McCain says he will spend less. A pretty clear dichotomy between the two.

By the way the "Bush" tax cuts have not in any way contributed to the current economic problems. Revenue collection has increased not decreased as a result of the tax cuts. The cuts spurred economic growth. More growth equals more taxes (yes I know at some point in tax cutting this no longer holds. We have not yet reached that point). The fact of the matter is that after 9/11 we were headed for a recession. Anybody remember that? The Republican response. cut taxes! This lead to 7 years of a strong economy . It would still be strong if the housing bubble did not burst. A housing bubble caused by democratic policies.

Of course I have little hope that the public will grasp this. It is much easier to understand take from the rich and give to the poor is the cure. Election advantage OBama the socialist.

The Reason for the Siezing (of the economy)

Hats off to Monmouth Musings. Take a look at the Fox video that reveals the reason for the crisis and the videos which explain the House Republicans position. These tell it like it is.

The fact of the matter is Wall Street has us by the short hairs. They are overreacting. Yeah they have some bad mortgage loans but enough to bring down the economy? They say it has caused a credit crunch. Do they really have to stop lending to everyone or maybe they should just stop lending to bad risks? The stock market is tanking. Why? many of these companies still have strong value. The amount of decline is because of one thing. PANIC. Wall Street should follow the advice they give us and invest for the long term. The question is how do you stop an irrational overreaction?

If we do nothing and make Wall Street fix its own problems do we have a year long recession or do we have a Depression? Can we afford to take the gamble? We have to do something but I tend to think that the Paulson plan stinks. Can we find a better way. Rep. Thadeus Cotter has some good points. Are there any economists out there who want to weigh in.

Now they are both full of it.

Obama and McCain have both made statements that the financial failure that are occurring will not happen on their watch.

OOHHH PULLLease. As if anyone could keep that promise. Besides if they could keep it that would be a bad thing. The failure of Lehman Brothers, Merrill Lynch, Freddie Mack, Sallie May etc..etc... where caused by something I like to refer to as" the free market". yes the financial genius at these companies got carried away and made bad decisions and now they are paying the price. Just like a lot of Americans accrued more debt then they could handle and are now paying the price. The Market rewards good decisions and eventually punishes bad decisions. Here is a novel concept people in the market must be responsible for the consequences of their actions. Ohh wait we do not believe in responsibility.

If we regulate away the ability of people to make bad financial decisions they will be limited in the amount of risk they can take and some highly profitable good decisions will be foreclosed to them thereby limiting the ability of the market to work. Two sides same coin. Some bad decisions have to be made to get some good ones. You have to have failures in order to have success..


All these "bad decisions" that these companies made and which eventually caused their
failure allowed these companies to make a lot of money for a lot of years. Introduced new capital into a lot of markets. Allowed a lot of people to buy homes who are not loosing there homes.

I would love to see some economist do a study as the whether the whole thing was a net gain for the economy a loss or a break even. Wouldn't that be interesting.

lets not Panic. do not through the baby out with the bath water. We will experience some short term pain, some more then others (and perhaps deservedly so) but we will easily survive this and if we do not overreact be better off in the long run

New Jersey Governor Corzine; Hypocrite and Jerk

I just heard Governor Corzine on the radio blame the fall of Lehman Brothers and Merril Lynch on 10 years of deregulation.

Thats it attack the same system that made you a multi billionaire and allowed you to buy the office of Governor.

WHAT deregulation Governor? What has changed over the last 10 years? what regulations where bdone away with that caused this so called calamity? What has the Democratic Congress tried to do to fix it?

Please Explain

Democratic presidential nominee Barack Obama said Monday the upheaval on Wall Street was "the most serious financial crisis since the Great Depression" and blamed it on policies that he said Republican rival John McCain supports.

Ok now somebody explain what policies and how with some specifics.

Is That asking too much?

Obama on Tax cuts

Obama has been running on his claim that Bush's tax cuts are bad and he would do a way with them.

Yesterday he said he might keep them around for a little bit if the economy is bad.

This is a tacit admission that the so called "tax cuts for the rich" are good for the economy.

It also exposes the fact that Obamas tax policy is not based an economics but based on wealth redistribution.

Can you say socialist?

Obama's Social security Solution

With some bumps in the road our economy has grown for the last 25 years.

Even the recessions we have had have been minor when compared to the historical economic cycle of boom /bust.



One of the biggest reasons for this is not tax cuts or other economic policies. It is because the creation of IRA's, 401 k accounts and other similar vehicles that opened up investment opportunities to the average Joe. This has done two things, created wealth on an unprecedented scale and increased the capital available for businesses to expand.



It actually does the opposite of Social Security which removes capital from the economy because current funds are not invested for future use but instead replaces income of people not working.

This is not only the fundamental flaw in social Security that will cause it to crash but it is actually bad for the economy.



This is why Obama's plan to Save Social Security will be a disaster for the US economy.



He will raise the earnings cap on Social Security taxes which will result in the middle and wealthy classes paying more into Social Security, thereby removing capital available for investment from the economy. It is the exact opposite of what should be done.